Can EVA Performance Evaluation Restrain Earnings Management

This thesis focused on the study of the correlation between EVA performance evaluation and earnings management, in order to investigate whether if EVA could restrain earnings management. The study made strict control for factors of effects from previous research results, and tested relationship between EVA performance evaluation and earning management through two analysis methods. The research samples were selected by Securities Exchange (Shanghai and Shenzhen) in 596 listed companies (type of stock A) from 2010 to 2013, the data would be separated into sample group and matched group according to EVA performance evaluation whether the enterprise adopted, and 298 companies of all belong to SASAC or local SASAC. By one-way anova analysis, independent sample T test and multiple regression analysis, I found the conclusion of different analysis methods were consistent, which meant the level of earnings management having significant difference whether the company used EVA performance evaluation. Meanwhile the company used EVA performance evaluation would intensify behavior of earnings management. The final results showed that this conclusion of research still has gone against essence and original intention of economic value added, and EVA didn’t make contribution to decrease agent cost. However, it was not caused by different research methods, and had nothing to do with the control factors of this study. EVA as a performance evaluation tool, we should admit the effects of the application in reality deviated from theoretical effects, as well as respected and identified with its empirical evidences.